House of Lords

Wednesday, 29th October 1997.

The House met at a quarter past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Oxford.

Lord Levy

Michael Abraham Levy, Esquire, having been created Baron Levy, of Mill Hill in the London Borough of Barnet, for life--Was, in his robes, introduced between the Lord Jakobovits and the Baroness Jay of Paddington, and made the solemn Affirmation.

Lord Blackwell

Norman Roy Blackwell, Esquire, having been created Baron Blackwell, of Woodcote in the County of Surrey, for life--Was, in his robes, introduced between the Lord McColl of Dulwich and the Lord Griffiths of Fforestfach.

Lord Dholakia

Navnit Dholakia, Esquire, OBE, having been created Baron Dholakia, of Waltham Brooks in the County of West Sussex, for life--Was, in his robes, introduced between the Lord McNally and the Lord Steel of Aikwood, and made the solemn Affirmation.

Lord Young of Graffham--Took the Oath.

Viscount Head--Took the Oath.

Single Currency: Advantages

2.50 p.m.

Lord Renton of Mount Harry asked Her Majesty's Government:

What advantages they foresee for the United Kingdom in joining the single currency in 2001-2002.

Lord McIntosh of Haringey: My Lords, the Chancellor of the Exchequer set out the Government's policy towards a single currency in his Statement on Monday last. The Government believe that in principle British membership of a successful single currency would be beneficial to Britain and to Europe. The potential benefits for Britain of a successful single currency are obvious in terms of trade, transparency of costs and currency stability. But it would not be in our national economic interest to join the single currency until we have achieved durable and sustainable convergence.

Lord Renton of Mount Harry: My Lords, I thank the Minister for that Answer, with which I broadly agree. However, perhaps I may take him a little further down the road since Monday. Does not a heavy duty now lie on the

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Government to ensure that the ordinary citizen of this country is well informed about the consequences of economic and monetary union before we join? Will the Government therefore consider, for example, commissioning an independent study from the Bank of England--a plain man's guide to the single currency--detailing the fact that after joining the single currency the British Government would still be able to raise and lower taxes? British pensions will not be affected. The monarch will not be affected, nor will the voting rights of hereditary Peers. Such a guide would, I believe, be very useful and should be available to every household in the land so that its members know precisely the issues before they vote in either a referendum or an election.

Lord McIntosh of Haringey: My Lords, I am grateful for both the tone and the content of the noble Lord's question. As he will know, the Chancellor launched a national debate on the single currency in July, with the publication of the report by my noble friend Lord Currie on the pros and cons of EMU and a practical guide for business. Eighteen thousand copies of the Currie Report have been sent to libraries, sixth-form colleges, universities and the general public.

That is what we shall do. In the meantime, the Standing Committee, headed by the Chancellor and including the Governor of the Bank of England, will look into the matter of public information. I am sure that they will take very seriously the valid point made by the noble Lord that we need good public information--independent and objective public information--on this important issue.

Lord Marsh: My Lords, given that the--

Lord Stoddart of Swindon: My Lords, is my noble friend aware--

The Lord Privy Seal (Lord Richard): My Lords, with great respect, we have plenty of time. I should have thought that the noble Lord, Lord Marsh, could ask his question first and then my noble friend could ask his.

Lord Marsh: My Lords, given that the North American Free Trade Area and ASEAN have both operated for many years very efficient trading blocs without even considering the need for a single currency, why is it crucial for Europe?

Lord McIntosh of Haringey: My Lords, those are very different organisations, with different objectives. Europe has for many years set itself to be much more than a free trade area. Had it not done so, no doubt the European Free Trade Area would still be in existence.

Lord Stoddart of Swindon: My Lords, is my noble friend aware that I, and many other people, believe that a single currency in 2001-2002, or at any other time, will not be good for this country and is completely

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unnecessary for our trade with Europe or the rest of the world? Has my noble friend read the extraordinary remarks of Mr. Kenneth Clarke in today's newspapers, whereby he advocates a cross-party campaign to brainwash people into a single currency? Is he further aware that Mr. Kenneth Clarke is already a member of the European Movement, which is supported by big business and the BBC--which has become the Pravda of the airwaves as regards this particular issue--and has been subsidised by the British taxpayer to the extent of £240,000 and by the European Commission to the extent of £150,000? May I have an assurance that taxpayers' money will not be used in this way again and on one side of the argument?

Lord McIntosh of Haringey: My Lords, I paid tribute to my noble friend on Monday for his consistency. He is still consistent, and he is still wrong. I have indeed read the remarks of Mr. Kenneth Clarke. I did not notice anything among them that suggested it was desirable to brainwash the British people. The Answer that I gave to the noble Lord, Lord Renton of Mount Harry, indicates that we have an obligation of information, but that it should be objective and impartial.

Lord Hooson: My Lords, adverting to the suggestion of Mr. Kenneth Clarke, does the noble Lord agree that what is proposed by Mr. Kenneth Clarke--namely, an all-party "yes" campaign to enable the Government to hold a referendum during this Parliament--would be a much more educative programme for the people of this country than any objective study? The "yes" campaign would of itself provoke a "no" campaign; and between the two the people of this country would become better informed. The referendum could be held during this Parliament, and the Government would then have an option to enter EMU at the best time for this country.

Lord McIntosh of Haringey: My Lords, public information--impartial information--and a yes/no campaign are not incompatible. Both are necessary if there is to be proper debate. I have not heard it suggested, nor did I understand Mr. Kenneth Clarke to suggest, that taxpayers' money should be used in anything other than an impartial way. That does not detract from the value of a "yes" campaign or indeed a "no" campaign.

Lord Pearson of Rannoch: My Lords, is the noble Lord aware that it is almost impossible to find on the face of this planet foreign exchange dealers who will tell the truth as to just how ill-conceived they judge this whole EMU project to be? Is the noble Lord further aware that they have shown their true feelings by taking out massive forward contracts in the foreign exchange markets, which will prove very profitable to them and very damaging to the people of Europe provided that EMU takes off and then fails to fly and crashes, as they are sure it will?

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Lord McIntosh of Haringey: My Lords, the noble Lord asked me the same question on Monday. My answer is very much the same. I am not privy to any of the internal thoughts of foreign exchange dealers, which they are presumably concealing from their clients as well as from the general public. The idea of taking out forward contracts four or five years in advance in the hope of a crash in the European single currency seems rather exaggerated.

Lord Bruce of Donington: My Lords, will the noble Lord inform the House as to whether the Government have seriously considered the text of Protocol 5 to the Maastricht Treaty, and in particular paragraph 2 thereof? The paragraph requires that the total debt of a country should not exceed 60 per cent. of its gross domestic product. In view of the fact that state pensions on the Continent have not been funded, and ought to be included in the liabilities, does the noble Lord think that any country other than the United Kingdom would be entitled to belong to the single currency?

Lord McIntosh of Haringey: My Lords, this matter, among many others, will be considered again under the UK presidency when the heads of government meet in the first six months of next year to consider in detail the convergence criteria that will apply to the first membership of the single currency.